Successfully Managing Unemployment Benefits Claims

Unemployment insurance is a state-by-state issue, yet many of the same processes take place in almost all states. When an employee separates from a job, he or she can file a claim for unemployment benefits. A copy of this claim is sent to the employer. Employers should carefully consider whether to contest a former employee's claim for unemployment benefits. Contested claims can generate anger or desperation and frequently motivate an employee to file legal actions against the employer.

Responding to a Claim for Unemployment Benefits
Successful processing of an unemployment claim may seem to be little more than filling out a form and returning it to the unemployment office. Unfortunately for many employers, treating a claim in this manner may be the first step in allowing unwarranted payment of benefits to occur. The unemployment insurance system is designed for paying benefits. Employers must be able to show why benefits should not be paid in questionable cases.

Response to a claim is required by law. Some states impose a monetary penalty for nonresponse. Two key rules to observe when responding are:

• Respond in the prescribed time period, and
• Include in your response all facts and supporting documents that will affect the claimant's eligibility.

Time Limitations
There is always a time limit for responding to a request for separation information (the "last employer claim"). If you fail to respond within the required time period, you may lose the opportunity to provide information that affects the claimant's eligibility. The time limit varies by state. Most states allow ten days response time; check the claim form to verify the time allotted in your state. Note that the time may be measured in consecutive days or business days.

Information submitted after the statutory time limit may be considered in determining a claimant's eligibility, but each state operates under its own standards for allowing new information. Generally, no new determination of eligibility will be issued unless the employer establishes good cause for the late response.

Verifying the Claim and Providing Additional Information
The first step in preparing your response is to thoroughly review the claim document. Does the information on the claim match the information you have? Is the name correct? Is the Social Security number correct? Are the work dates correct? Such administrative review is important to confirm that the information furnished by the claimant reflects the true status of his or her employment with you.

Review the reasons given by the ex-employee for leaving the job. Most eligibility issues are decided according to this information. Do the reasons listed match the reasons known by the employer? All employers should have thorough documentation on the reasons for, and any history connected to, the separation of any employee. Gather all documents related to the separation.

Establishing Eligibility
Unless the person has been laid off for lack of work, filing a claim does not automatically result in eligibility for benefits. The claims interviewer in the state employment office will interview the claimant to establish the facts of the separation and determine eligibility. In the case of a voluntary resignation, the interviewer will want to determine if the resignation was with "good cause," that is, if a "reasonable person, genuinely desirous of retaining employment, [would] have taken the same action if given the same set of circumstances." If the separation was involuntary, the interviewer will attempt to determine if misconduct was associated with the discharge.

Misconduct
Misconduct is generally understood to mean "a deliberate violation of a reasonable standard of behavior that the employer has a right to expect from the employee." The definition of misconduct rests on four basic principles:

• Duty—What was the duty owed the employer by the employee? What was the job standard, policy, or procedure?
• Breach—What did the employee specifically do that was in violation of the employer's standard of behavior?
• Willful—Was the employee fully aware of his duty and did he know that he was neglecting it?
• Injury—What was the injury to the employer's interests?

Employee Ineligibility for Benefits
The following are some conditions that commonly protect the employer from benefits liability (note that the state holds discretion in determining liability):

• The employee quit without good cause.
• The employee was discharged for misconduct connected to work.
• The employee left work because of a trade dispute (labor strike).
• The employee is currently working full-time.
• The employee is not physically able to work.
• The employee is not available for work or is not seeking work.
• The employee refused suitable employment with your company or elsewhere.
• The employee made false statements to obtain unemployment benefits.
• The employee is receiving a pension that is paid under a plan contributed to or maintained by, the employer.

If you contend that the employee is ineligible for benefits for any of these reasons, you must give reasons for your contention. Make your response as complete and explicit as possible, and be prepared to provide evidence and documentation to support your position.

Reprinted from Council’s HR Today newsletter. To subscribe or order a free trial subscription, click here.

Council's Employment Law Certificate Program for HR Professionals is a 4½-day event that will provide you with a comprehensive overview of all aspects of employment law, including unemployment benefits and other posttermination issues. For more information on this program, including a detailed agenda, dates, and locations, click on the link above.